Skip to main content
Marsh logo

Article

Navigating opportunities: Accountants in a changing landscape

Explore how accountancy firms can navigate growth, mergers, and investments while managing insurance risks and regulatory requirements. Learn expert strategies to optimize insurance coverage and seize new opportunities in a changing landscape.

16/07/2025 · 4 minute read

Globally, professional service firms are facing increasing financial pressures and risks driven by factors such as the war for talent, regulatory changes, and inflation. Coupled with heightened competition, these challenges have prompted many firms to explore external investment as a strategic response, aiming to weather economic uncertainties, fund technological advancements, bring in specialist skills and support growth. This trend is evident worldwide, with notable increases in mergers, acquisitions, and private equity investments within the professional services sector.

In the UK, the accountancy industry, traditionally dominated by established firms and partnerships is no exception. Recent high-profile deals include the sale of Evelyn Partners Group’s professional services arm to Apax Partners and Grant Thornton’s investment from Cinven. According to the Institute of Chartered Accountants in England and Wales (ICAEW)’s research, Evolution of mid-tier accountancy firms 2025, detailed that 80% of firms had made an acquisition in the past, and 67% of firms were expecting to acquire a firm in the next three years. In addition, the survey said that 25% of firms had received private equity investment already, and 25% expected to receive such investment in the next three years.

As these transactions increase, firms must carefully consider the associated insurance risks and opportunities whether they are acquiring, merging, or attracting investment.

Professional indemnity insurance: Regulatory considerations

Firms regulated by ICAEW, the Institute of Chartered Accountants of Scotland (ICAS), or the Chartered Accountants Ireland (CAI) are required to hold professional indemnity insurance (PII). This obligation influences decisions around inorganic growth, as firms must ensure their insurance coverage aligns with regulatory standards and adequately protects against civil liability claims arising from being in public practice.

Firms with annual fee income under £50 million (or equivalent), the regulations stipulate that the insurance policy must meet a minimum approved wording, with a participating insurer and with specified limits and excesses. Once a firm’s relevant fee income exceeds this threshold, they have much greater flexibility, though the obligation to take all reasonable steps to meet claims remains.

It’s important to recognise that other regulatory bodies such as the Association of Chartered Certified Accountants (ACCA) may impose different PII requirements, which firms must also adhere to.

Insurance implications and opportunities during growth and investment

When a firm is involved in acquisitions or investments, several insurance considerations come into play:

  • Regulatory compliance: Any changes to coverage must comply with applicable regulations and PII requirements, ensuring the firm’s insurance programme is attractive and compliant.
  • Continuity and adequacy of coverage: Ensuring ongoing insurance coverage remains sufficient for the enlarged, merged or acquired entity is critical. This includes assessing whether existing policies can accommodate new risks, the potential additional costs, and whether coverage limits are adequate.
  • Claims history and due diligence: Insurers will scrutinise the claims records and work types of legacy entities. Proper due diligence is essential to identify potential exposures that could impact future insurability and premium costs.
  • Policy integration: Acquiring a new entity often involves decisions about integrating or replacing existing policies. Cancelling pre-existing policies without proper planning can lead to the loss of a premium refund, or gaps in coverage and differences in self-insured retentions, leaving the wider group and acquired firm more exposed in the event of a future claim.
  • Run-off cover: Despite thorough due diligence, some liabilities may remain hidden. In such cases, separate run-off cover can be considered to ring-fence past liabilities, allowing them to be absorbed into the group insurance arrangements over time.
  • Risk management and cost savings: Consolidating insurance programmes can deliver significant cost efficiencies, improved access to insurer decision-makers and a streamlined renewal process. With investment comes opportunities for increased risk management resources and working closely with your broker can enhance your risk profile, potentially unlocking benefits such as premium savings, a bespoke policy wording (including automatic cover for mergers and acquisitions and coverage for regulatory investigations), and innovative risk retention options such as captives.

The value of expert guidance

Navigating these complex considerations requires the expertise of an experienced broker who understands your firm, the industry, and the evolving market landscape. At Marsh, our specialists are equipped to support accountants and insolvency practitioners of all sizes whether you’re expanding, acquiring, or restructuring. We can help you optimise your insurance policies, manage risks effectively, and help you to seize opportunities for growth.

Author: Troy Russell, UK Accountants Practice Lead, Professional Indemnity Insurance, FINPRO

Read another article from Marsh’s Risk Reconciled newsletter

New “failure to prevent fraud” offence under the ECCTA Act: What accountants need to know before 1 September 2025

Click to read

Related insights

Businessman reading documents

Article

UK Employment Law and the Importance of EPL Insurance

09/06/2025
business people group in modern office have a team meeting and brainstorming while working on tablet or laptop presenting ideas and take notes

Video

The importance of Inclusion in Professional Services

23/05/2025
Placeholder Image

Video

Generative AI and Professional Services – Rethinking Risk

16/04/2025
Business people walking with iPad

Article

Commercial crime insurance: An “all risks” approach helps protect against emerging fraud risk

14/03/2025
View more